Steel industry wants bigger handout

The federal government is considering future transitional assistance for industries affected by the carbon pricing scheme as steel makers yesterday met with Climate Change Minister
Greg Combet
to press for higher assistance.

Mr Combet held discussions with senior executives from the two main steel makers –
BlueScope
and
OneSteel
– as the government finalised the package of industry assistance under the carbon scheme that will be announced on Sunday.

The steel executives are understood to have been told it was unlikely that they would receive more assistance than under the Rudd government’s proposed Carbon Pollution Reduction Scheme at this stage but may be given more help later.

The scheme’s impact may be reviewed and higher assistance could be available at a later stage if it has a greater than estimated effect on industries.

The government has also been lobbied to widen its definition of what is regarded as an industry eligible for assistance as an emissions intensive and trade exposed sector.

The steel companies have been providing the government with detailed confidential information on the likely impact of the carbon price on the sector.

The steel industry has been pressing to be exempted from the carbon pricing scheme until its competitors in other countries, such as China, introduce an equivalent carbon tax or emissions trading scheme.

But the government has rejected this bid and the industry has been lobbying for higher assistance than it received under the old CPRS.

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The government estimated the CPRS would increase costs in the steel industry by $2.60 a tonne. The assistance for steel under the CPRS was based on 94.5 per cent free permits.

But the steel makers contest the government’s view that the cost impact would be $2.60 a tonne and are demanding higher assistance.

The government has held almost continuous consultations with manufacturers over recent months on the details of the carbon pricing scheme.

BlueScope Steel chief executive
Paul O’Malley
, who is understood to have attended the meeting withMr Combet, has warned that a carbon tax would do “irreparable damage to the Australian steel industry".

Treasurer
Wayne Swan
yesterday flagged transitional assistance across a range of industries and called on industry not to be alarmist.

“And of course we have said we will be providing transitional assistance across a range of industries where there are these challenges, but it is far too early for anyone to be out there making these sorts of claims in this alarmist way."